GoGold Resources Inc. Just Reported A Surprise Loss: Here's What Analysts Think Will Happen Next

Shareholders of GoGold Resources Inc. (TSE:GGD) will be pleased this week, given that the stock price is up 12% to CA$3.07 following its latest quarterly results. It looks like a pretty bad result, given that revenues fell 11% short of analyst estimates at US$8.9m, and the company reported a statutory loss of US$0.002 per share instead of the profit that the analysts had been forecasting. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for GoGold Resources

After the latest results, the consensus from GoGold Resources' four analysts is for revenues of US$44.5m in 2022, which would reflect a perceptible 7.3% decline in sales compared to the last year of performance. Per-share earnings are expected to shoot up 367% to US$0.039. In the lead-up to this report, the analysts had been modelling revenues of US$55.1m and earnings per share (EPS) of US$0.06 in 2022. Indeed, we can see that the analysts are a lot more bearish about GoGold Resources' prospects following the latest results, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

The analysts made no major changes to their price target of CA$4.66, suggesting the downgrades are not expected to have a long-term impact on GoGold Resources' valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic GoGold Resources analyst has a price target of CA$5.05 per share, while the most pessimistic values it at CA$4.10. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting GoGold Resources is an easy business to forecast or the the analysts are all using similar assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 9.6% by the end of 2022. This indicates a significant reduction from annual growth of 27% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 9.2% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - GoGold Resources is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at CA$4.66, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for GoGold Resources going out to 2024, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 2 warning signs for GoGold Resources you should know about.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.